IndiGo signs term sheet for 50 ATR72-600

Domestic market leader IndiGo today announced that it has signed a term sheet with turbo prop manufacturer ATR for 50 ATR72-600 aircraft. The first seven aircraft are expected to join the fleet this financial year and the airline expects to take the fleet to 20 aircraft by end of 2018. The airline would bid for routes under UDAN – The Regional Connectivity Scheme.

The deal with ATR is valued at USD 1.3 billion at list price but is certain that the airline would pay much lesser than that. The airline has not specified the configuration but could go for 78 seater cabin. This will let the airline have the same number of seats as rival Spicejet has in its Q400 aircraft.

The first ATR72-600 was delivered to launch carrier Royal Air Maroc in 2011. The biggest change in the ATR72-600 over its earlier version -500 is the new avionic suite and “Glass cockpit” replacing the Honeywell-Collins deck with avionics from Thales.

Term-sheet or a Letter of Intent (LOI) is a legal document which finalizes the basics including price and other incentives. This is also followed up with a small payment. The term sheet specifies the target date for the final signing of documentation. In the past the LOI between Airbus and IndiGo had lapsed but the airline went ahead and placed the order based on the previous LOI, thanks primarily to the relations between Airbus and IndiGo.

The airline expected to close fiscal year 2018 with 170 aircraft, an increase of 39 aircraft over the fiscal end of 2017. The airline will continue to face challenges for expanding in one of the fastest growing but plagued by congestion at all major airports.

Will the airline also order the A330neo or the A350 and launch a long haul subsidiary or operations under the current brand? Time will tell. .

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